Indo-Japanese trade and civil nuclear pact

Signing a “win-win” civilian nuclear deal with Japan, Indian Prime Minister Manmohan Singh has said he was confident that India will be able to conclude an agreement on nuclear deal which will be a win-win proposition for both countries and that India is ready to work with Japan and other like-minded countries in realising the vision of a nuclear weapon-free world.
Manmohan Singh also said that India is negotiating an agreement on the peaceful uses of nuclear energy with Japan and India’s nuclear industry is poised for major expansion of the country’s nuclear energy programme
On India’s refusal to sign Nuclear Non-Proliferation Treaty (NPT), Singh cited New Delhi’s impeccable non-proliferation record which is recognised by the international community and said that New Delhi is committed to maintaining unilateral and voluntary moratorium on nuclear explosive testing.

Sources said that interest for civil nuclear cooperation was first expressed by Japan, apparently because its companies are very keen.

Japan is promoting the use of nuclear energy and has already integrated nuclear power into its national power grid on a massive scale since billions of dollars are in contract for the construction of two and possibly as many as six more new Indian nuclear plants are in motion.
India-Japan trade currently stands at $10 billion and is expected to double in the next two years. While the successful conclusion of a Comprehensive Economic Partnership Agreement (CEPA) is reason for satisfaction, – Japan is the third country with whom India has signed a CEPA — much work remains to be done. Japanese businessmen have often complained about corruption and bureaucratic hassles that trip up their business ambitions in India. India will have to address these problems to be able to reap fully the benefits of CEPA. It must also find a way to correct the huge trade deficit with Japan.

The negotiations for the CEPA began in 2007 and the agreement could not be signed as Japan needs to complete certain internal processes, such as clearance from its Parliament (Diet) which will take some time.

That a nuclear deal was not clinched during the prime minister’s visit is disappointing. While India has other options, Japanese companies are at the forefront of nuclear power generation technology and several American companies too are now partially or wholly Japanese-owned. Thus, a nuclear deal with the Japanese is imperative for India. However, Tokyo continues to insist on India signing the NPT. This will mean that Delhi must step up its efforts to ease Tokyo’s worries. If Delhi wants to reap the full benefit of the Nuclear Suppliers Group’s (NSG’s) rewriting of its rules of nuclear commerce with India, it will have to get Japan on board.

Japan had reacted very strongly when India conducted nuclear tests in 1998. India feels that the progress on negotiations for the nuclear deal will be slow, given Japan’s sensitivities.